The company says it will focus going forward on its property and casualty, group-benefits and mutual-funds businesses.

Hartford’s decision was likely linked to the economic downturn, when it was caught with variable annuities that offered guarantees to investors.

Hartford's innovations, including guarantees, in the VA market forced other market players to follow, resulting in an increase in a VA market that had been in the doldrums since the Bush tax cuts that helped lift total VA sales to $180 billion in 2007.

However, as the stock market plunged and the economy sunk, the product began to take a heavy toll on Hartford.

By late 2008, it was seeking outside investors and funds from the Troubled Asset Relief Program initiated by the Bush administration in the fall of 2008.

Its need to “derisk” the business has resulted in a plunge in market share and investment in the business. From a top sales spot in the mid-2000s, Hartford finished 2010 in 20th place among leading variable-annuity sellers, and last year it didn't make the top 20 chart compiled by industry-funded research firm LIMRA.

The Hartford’s net income for 2011 fell 61 percent to $662 million. Individual-annuity earnings for the 2011 fourth quarter were also down by 10 percent from a year ago (from $96 million to $86 million), due to what the Hartford described as increased annuity outflow.

The runoff of the annuity operation also affects its fixed and fixed-indexed annuities, a much smaller proportion of its book of business.

McGee says in a statement released at 5 a.m. this morning that the company's sharper focus “positions the Hartford to deliver superior performance and greater shareholder value."

He says the company is placing its individual-annuity business into runoff “and is pursuing sales or other strategic alternatives for its individual life, Woodbury Financial Services and Retirement Plans.”

McGee says the company will stop new annuity sales effective April 27 and expects to take a related after-tax charge of $15 million to $20 million in the second quarter of 2012.

This action is also expected to reduce annual run-rate operating expenses by approximately $100 million, pre-tax, beginning in 2013.

McGee says the Hartford's sharper focus will lead to an organization that, over time, will be positioned for higher returns on equity, reduced sensitivity to capital markets, a lower cost of capital and increased financial flexibility.

"With this portfolio and the actions we are taking, we are on the right path to unlock value and deliver superior, long-term returns for shareholders," McGee says.

He said that in the commercial and personal P&C markets “we will leverage our expertise in underwriting, distribution and claims management, to both improve returns and grow profitably.”

He said mutual funds “is a high-return business, and we are enthusiastic about our strategy to accelerate sales growth with the expanded Wellington Management sub-advisory relationship."

Paulson projected in a recent SEC filing that a reorganization through a spinoff of Hartford’s property and casualty operations would raise the value of the company to Hartford shareholders to $32 per share.

Analyst, however, appeared split on the long-term benefits of such action.

Share price for The Hartford (HIF) raised several points immediately after the announcement Wednesday morning.